Cash Pain to Stay, Arun Jaitley Says Printing New Notes Will Take Time

File photo of Finance Minister Arun Jaitley.

New Delhi: Union Finance Minister Arun Jaitley said on Friday said that secure printing of the new currency notes is a time-consuming exercise.

“If you need to replace 86% of a country’s cash currency, you have to have a substantial part ready," he said while addressing the inaugural session of HT Leadership Summit 2016.

Jaitley defended the case of demonetisation by linking it to the cause of a digital economy. One of the advantages of this exercise is that it will reduce the quantum of paper, he said.

“Once remonetisation is complete, will see more of digitised expenditure, developed taxation system, ease of business,” he said.

“Black money has been a norm in India for seven decades, we want to confront it and create a new normal," he added.

Volume of trade, business will grow but size of paper currency will shrink, he claimed. He also stressed that India will continue to be fastest growing major economy in world like last year. He added that Rabi sowing is higher than last year; mixed trend in auto sales.

Jaitley said some disruption is bound to be created due to switchover but long term advantages are huge and the country has welcomed demonetisation. He said the demonetisation move would ensure that political funding become "transparent".

"Today each person gets assessed for tax at least thrice. In future, the effort is to simplify and ensure just one assessment," he said.

"We are at the cusp of change and the battle between the taxman and the people who try to beat the system will continue," he added.

Jaitley said demonetisation was one of many steps that government was planning to take to transform the economy while pitching the case for GST.

“GST is now a constitutional compulsion before the 16th Sept 2017. The Intention was to implement it from 1st of April 2017. Once the remonetisation is completed, it will impact the business and will be a new way of life,” he said.

GST and demonetisation together will be a game changer, he added.

However, he also issued a warning to the states that were opposed economic reforms. “Investors will be wary of some states seen on wrong side of reforms,” he said.